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1. The formula for the basic accounting equation is
OWNER'S EQUITY = TOTAL ASSETS + TOTAL LIABILITIES.
TOTAL ASSETS = TOTAL LIABILITIES - OWNER'S EQUITY.
TOTAL ASSETS = TOTAL LIABILITIES + OWNER'S EQUITY.
OWNER'S EQUITY = TOTAL LIABILITIES - TOTAL ASSETS.
TOTAL LIABILITIES = TOTAL ASSETS + OWNER'S EQUITY.
2. An increase in accounts receivable from last year's balance sheet to this year's balance sheet indicates that the business experienced a cash outflow.
True
False
With this type of proforma method, we look ahead on our balance sheet for large, incremental changes such as the expansion of a new factory. In this fashion, we are able to identify financing needs
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